Will Zune Be Reborn As A Handheld Xbox?

Microsoft's Zune media player never really caught fire, or generated much heat at all. And while Microsoft appears committed to Zune's services and features, ZDNet speculates that Zune as we know it isn't long for this world.

Since most people are familiar with - or at least exposed to - Zune primarily through their Xbox, writes Mary Jo Foley, wouldn't it make sense to rebrand Zune services as something like Xbox Entertainment? And to turn the rumoured Zune HD2 into a portable Xbox? After all, a key part of Microsoft's Xbox strategy is to make it your number one content delivery device, above and beyond games. A PMP with WP7-like Xbox Live integration would drive that message home.

All we really know for now are that Microsoft execs aren't using the Z word, and Kin's untimely demise shows that Ballmer's not afraid to kill his darlings. But the media distribution aspect of Zune is far too important for Microsoft to give up on entirely. So why not fold it into its vastly more popular Xbox brand, which is where it primarily lives anyway? Sounds like the smart thing to do. Whether that's what will actually happen, though, is another question entirely. [ZDNet]